Identification
A long black day is followed by a white day that gaps below the black day’s
low and closes within and above the midpoint of the black day’s body.

The Psychology
In a downtrend or during a pullback within an uptrend, the stock gaps
down, finds some buyers and then rallies. This simply signifies the possibility
of a reversal that is more reliable if the gap down occurs at support
and the white day is accompanied by a surge in volume.

GE was trending sideways with well established support. Although bullish Piercing Line candles are considered reversal patterns, we think the reliability of the candle increases if played at support as shown here.

GM formed a Piercing Line candle formation at support, and that started the next leg up. How far it goes is unknown when the pattern forms. All you can do is play it and move stops according to the pricing action. In this case it turned out to be a good one.

Like the other examples, AMZN formed a bullish Piercing Line formation right at support, and that started a better than 30% move in under one week.